Qualcomm (Nasdaq:QCOM), Broadcom (Nasdaq:BRCM), Atheros (Nasdaq:ATHR), Altera (Nasdaq:ALTR), Omnivision (Nasdaq:OVTI), Spreadtrum (Nasdaq:SPRD) and Semiconductor Rally

Commenting on a number of companies in the semiconduction industry, FBR Capital openly questioned how long companies like Qualcomm (Nasdaq:QCOM), Broadcom (Nasdaq:BRCM), Atheros (Nasdaq:ATHR), Altera (Nasdaq:ATHR), Omnivision (Nasdaq:OVTI) and Spreadtrum (Nasdaq:SPRD), among others, can continue to move up as they have.

FBR said Our latest 4Q production start checks were largely stable versus our prior month checks in aggregate, with slight production improvements by Qualcomm; Broadcom, and Atheros fully offset by production cuts from Altera and Mediatek. On a sequential basis, we still think 4Q production starts will grow by roughly 3%-4% QOQ due to production increases from Qualcomm, Broadcom, Omnivision, and Spreadtrum, and largely offset by sequential production decreases from AMD (NYSE:AMD), Atheros, Marvell (Nasdaq:MRVL), Silicon Labs (Nasdaq:SLAB), Nvidia (Nasdaq:NVDA), and others. Clearly Qualcomm is prepping its basebands for the launch of the CDMA iPhone, and possibly the rest of Apple's (Nasdaq:AAPL) iPhone and iPad product lineup. Our first look at 1Q'11 production starts is surprisingly resilient, with 1Q starts set to grow about 1% QOQ in aggregate. For 1Q'11, a large sequential increase in production starts from Qualcomm and modest production increases from PC chip suppliers AMD, Nvidia, and Marvell are more than fully offsetting traditional seasonal declines in production starts from others. Regarding the sector, we note that chip stocks have had a powerful rally since September 1 with meaningful rallies in stocks like BRCM, QCOM, Texas Instruments (NYSE:TXN), MXIM (Nasdaq:MXIM), Fairchild Semi (NYSE:FCS), Int'l Rectifier (NYSE: IRF), Microsemi (Nasdaq:MSCC), and others. So, while chip stocks seem to want to rally into the end of the year, we wonder how long a straight move higher can continue."

Altera closed Monday at $37.40, down $0.31, or 0.81. Qualcomm closed at $48.32, falling $0.50, or 1.02 percent. Broadcom finished at $45.57, losing $0.19, or 0.42 percent. Atheros finished the day at $34.33, gaining $0.52, or 1.54 percent. Omnivision ended Monday at $31.49, up by $0.37, or 1.19 percent. Spreadtrum closed at $17.39, losing $0.08, or 0.46 percent.